Customer Reviews


26 Reviews
5 star:
 (24)
4 star:
 (1)
3 star:    (0)
2 star:    (0)
1 star:
 (1)
 
 
 
 
 
Average Customer Review
Share your thoughts with other customers
Create your own review
 
 

The most helpful favorable review
The most helpful critical review


16 of 20 people found the following review helpful
5.0 out of 5 stars Another Book Review from the Aleph Blog
I am going to say something that I rarely say: I am grateful that this book was written. Why am I grateful?

* It highlights the idea that people, even really bright people, do not behave rationally, but imitatively -- they follow recent price action -- they mimic.
* It validates the concept of a "crowded trade," one that offered high returns in the...
Published on August 28, 2012 by David Merkel

versus
1 of 33 people found the following review helpful
1.0 out of 5 stars Why does Kindle version cost 3 dollars more than the hardcover?
Amazon, publishers, authors:

Would it be possible to explain why an electronic version of a book costs 3 US dollars more than the hardcover edition?
What part of Econ101 did I sleep through that might explain this discrepancy?

Ahh, who gives a darn, it's just oil, trees, water, chemicals that we waste with the hardcover edition. What the heck,...
Published on August 28, 2012 by Brad K Ervin


‹ Previous | 1 2 3 | Next ›
Most Helpful First | Newest First

16 of 20 people found the following review helpful
5.0 out of 5 stars Another Book Review from the Aleph Blog, August 28, 2012
By 
David Merkel "Aleph Blog" (Ellicott City, MD United States) - See all my reviews
(REAL NAME)   
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
I am going to say something that I rarely say: I am grateful that this book was written. Why am I grateful?

* It highlights the idea that people, even really bright people, do not behave rationally, but imitatively -- they follow recent price action -- they mimic.
* It validates the concept of a "crowded trade," one that offered high returns in the past, may presently offer low returns to a "buy and hold" investor, but will deliver negative returns in the near future, because the holders of the trade are relying on the trade to deliver positive returns in the short run, and will bail if it doesn't happen.
* It points up the nonlinearity of markets, and invalidates the efficient markets hypothesis; it validates the concept of the boom-bust cycle both in micro and macro.
* It teaches us to not take on too much debt, even if we are really, really smart. We aren't as smart as we think we are.
* In short, it sums up a lot of my philosophy at The Aleph Blog. Real risk control thinks long term, and considers what will happen if liquidity dries up. Real risk control knows that large positions in any asset relative to the market must be regarded to be "Buy-and-hold" regardless of what your trading intentions are. False risk control assumes that markets always function, and that your relative size versus the market does not matter.

The author of the book has led a storied life. He was a quantitative analyst hired to work in risk control for Long Term Capital Management [LTCM] near its inception, and continued with them through the failure. After that, he worked for Rydex, built FOLIOfn, and worked for the Bank of International Settlements, and Schroders. He now works as a professor of finance at the University of San Francisco, after having gotten a PhD from MIT. He knows the markets both practically and experientially, like me, though he is better than me.

LTCM is a great example of what happens when some really smart guys find clever ways to make money in the markets, and then overplay them. The trade that has a buy-and-hold yield of 10% is genius. When it is 8% it is bright. At 6% it is average, why are you playing? At 4% it is dopey. But what happens when your trade gets big relative to the market? The rules change, much like JP Morgan recently. When you are big enough that you are moving the market as a normal practice, that indicates danger. You have become the market, and are distorting it. It will eventually come back to bite you, as JP Morgan recently learned.

The failure of LTCM may have been the template, but the author goes on to explain other disequilibrium situations such as:

* The quantitative equity panic of August 2007
* The failure of Bear Stearns.
* The failures of Fannie and Freddie (free money brings out the worst in all of us)
* The failure of Lehman Brothers.
* The failure of the banking system both in the US & Europe
* The failure of LTCM progeny in 2008 (no, we don't learn)
* The Flash Crash
* The failure of the Eurozone, so far. (It is performance art. How can we create the biggest failure ever? We will eclipse the Great Depression! Oui! Ya!)

I've written about most of these, and I can tell you the author does a good good job. Aside from that, he took time to interview primary sources as to their own view of the events that happened, particularly at LTCM and its progeny, and it adds to what we know about the crises that he wrote about.

People need to understand that crises are a normal aspect of markets. Until you understand that crises are normal, you will always take too much risk.

This is an excellent book; buy it and avoid losses.

Quibbles

In the beginning he got the name of Jim Cramer's firm wrong.

I would have eliminated the appendices if I were the editor; the audience that can benefit from the math is too narrow to be worth printing it in the book. Better you should put a PDF out on the web, and put out a slimmer book.

Who would benefit from this book: If you want to understand why crises happen, buy this book. It is well-written but requires some degree of market knowledge for the reader to benefit. It is not for beginners.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


2 of 2 people found the following review helpful
4.0 out of 5 stars Good read on a complex topic, December 27, 2012
By 
Verified Purchase(What's this?)
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
Ludwig does a good job catering to a variety of readers with this book. While it certainly covers financial complexities deeper than I, someone not in the industry, can appreciate, he writes with a simple and structured style that allows one to skim past the overly-knotty parts and intersperses the book with material that the layperson can both comprehend as well as enjoy. Ludwig poses some interesting questions for thoughtful readers to mull over, and I enjoyed the book so much I enthusiastically lent it to a friend.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


2 of 2 people found the following review helpful
5.0 out of 5 stars Insights to what really happens in Finance, February 28, 2013
Verified Purchase(What's this?)
Good and detailed into the workings of the financial world.

The content is great, however be aware that the layout and reading experience is very different in the Kindle and the Hardcover versions.

I bought the Kindle version and that was the first time I have regretted the Kindle version.
I do not know how they could mishandle the layout so badly.

However I bought the hardcover as a gift for a friend and that lives up to the content.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


2 of 2 people found the following review helpful
5.0 out of 5 stars A great insightful book about financial market, August 26, 2013
Verified Purchase(What's this?)
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
The author tells an excellent story about financial crisis from its background to its aftermath while educating readers about important knowledges of finance. Many details are covered, yet the concepts are straight forward. The book is nice for people who know some finance to have a good time walking through what was going on during 2008 financial crisis, and it is excellent for those who have moderate financial background to learn, improve and be surprised by how the market reacts with the crowd.

The book does not simply show readers facts of the crisis or provide shallow opinions, however, it analyzes the reasons behind incidents and makes you think deeply about the market.

Human behaviors are hard to predict and the crisis of crowds has not been eliminated. However, we will definitely know much more about it after reading this book and hopefully we can avoid most of the losses if similar situation happens again.

I'm happy that I bought the book.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


2 of 2 people found the following review helpful
5.0 out of 5 stars Good book, April 23, 2013
Verified Purchase(What's this?)
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
A book you must read if you are working in financial industry or you are a student majoring in finance.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


1 of 1 people found the following review helpful
5.0 out of 5 stars Must READ, December 12, 2013
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
This book opens your eyes to financial markets beyond theories. Many attempted to explain what happened during the most recent financial crisis. But, none could get access to insiders like this book to reveal the inner workings and the minds involved in the process. This book provides not only insights but also the framework to start thinking about where we are heading. Great book!
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


1 of 1 people found the following review helpful
5.0 out of 5 stars Recommend, March 31, 2014
Verified Purchase(What's this?)
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
Excellent presentation of all the players and their roles. Highly recommended reading. Chincarini understands the bigger picture well and conveys the same with ease and readability.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


5.0 out of 5 stars If I was his professor, I would give him an A+ for this book!, October 11, 2014
Verified Purchase(What's this?)
Since 2008, I have felt really stupid any time conversations about the 2008 Financial Crisis popped up. I knew in general what happened, but I never knew enough to contribute to a conversation. What I read in this book not only helped explain it in a language I understood, but it explained it in a way that I enjoyed reading. The book is actually pretty entertaining. He paints the financial crisis as a story, instead of really boring points. And Ludwig inserts his opinion in a very humorous light.

In addition, this book saved my grade in one of my classes. The book wasn't required for my International Finance class, but when I was assigned a project on Basel III, I found a couple chapters regarding the Basel Committee in this book. It was more helpful than any other website I looked at... including wikipedia! ( Wikipedia is not a legitimate source, I know. But undeniably a helpful source.) Anyways, I think I will use this book for a long time, as my primary reference for any 2008 questions that pop up.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


5.0 out of 5 stars Interesting Read., March 14, 2014
Verified Purchase(What's this?)
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
A colleague of mine suggested I read this book to understand crowding better. I loved it. The author uses does a great job of explaining it all.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


5.0 out of 5 stars Easy read to complex situations!, December 11, 2013
This review is from: The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal (Hardcover)
A complicated subject made simple. The author has significant insight behind the stories. He gives insight into the 2008 financial crisis and possible solutions. Can anyone predict the next crash? What are the financial signs? Read the book and you may gain insight from the past in order to prevent future devastations.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


‹ Previous | 1 2 3 | Next ›
Most Helpful First | Newest First

Details

The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal
The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal by Ludwig B. Chincarini (Hardcover - July 31, 2012)
$40.00 $29.02
In Stock
Add to cart Add to wishlist
Search these reviews only
Send us feedback How can we make Amazon Customer Reviews better for you? Let us know here.